EC welcomes agreement on new rules paving the way for better VAT collection on online sales

The Commission has welcomed the agreement reached by EU Member States on detailed measures needed to simplify VAT rules for sales of goods online, also ensuring that online marketplaces play their part in the fight against tax fraud.

The new rules agreed today will ensure a smooth introduction of the new VAT measures for e-commerce agreed in December 2017 and which will come into force in January 2021. They should also help Member States to recover the €5 billion in tax revenues lost in the sector each year - a figure due to rise to €7 billion by 2020. EU Economic and Financial Affairs ministers took the decision at their meeting in Brussels this morning. Commissioner for Economic and Financial Affairs, Taxation and Customs Union, Pierre Moscovici, said: “Step by step we are plugging the gaps through which tax revenues are lost, depriving EU countries of funds that could be used for public services and investment. At the same time we are bringing VAT rules into the 21st century, adapting them to an increasingly digital and globalised economy. Businesses should look forward to a smooth transition to the broader VAT system for e-commerce in 2021.”